AG: Probe into inflated prescription drug prices moving forward

Tom Latek

Kentucky Today

Jul 12, 2019

FRANKFORT – Attorney General Andy Beshear announced Friday his office is submitting a request for proposals, for outside legal help, in his investigation into pricing practices by pharmacy benefit managers.

He began the probe in March into the PBMs, who control the prescription drug market for several state programs. It is alleged that PBMs have overcharged the state health insurance programs for prescription drugs and discriminated against local pharmacies. Beshear seeks to recover any profits improperly retained by PBMs at the expense of the state and taxpayers.

A report released by the state earlier this year indicated two PBMs kept $123.5 million last year from the state Medicaid program, by paying pharmacies a lower rate to fill prescriptions than they charged the state for the same drugs.

Kentucky law gives the Attorney General authority to enter into such contracts for legal services as the attorney general deems necessary and advisable to defend Kentucky families.

Beshear said the RFP, competitive bid process will result in his office hiring additional resources in the most efficient manner, where the winning bidder receives no upfront state tax dollars and attorneys are only paid a set portion of any monies awarded in a civil action.

“Kentuckians should never have to ration necessary medication or go without because they cannot afford it,” said Beshear. “We all want to know if the actions of these companies have resulted in all of us paying too much for prescription drugs, and we’re going to find out.”

The RFP follows the state’s model procurement code guidelines and includes a contingency fee schedule pursuant to changes in state law made by the 2018 General Assembly, which also includes a fee cap. It outlines evaluation criteria and scope of work, which includes reviewing information and documents obtained through civil investigative demands and subpoenas; and recommending legal courses of action.

“I believe our government should only work for the people of Kentucky and our families deserve to be fully aware of the next steps my office is taking in this critical investigation into overpriced prescription drugs.” said Beshear. “I will continue to work to make sure our Kentucky families have access to fair and affordable health care.”

The AG’s office has requested that the RFP be posted July 16, on the state’s Vendor Self Service system, where state government solicitations are placed online for prospective bidders. Once posted, the RFP will be published along with the official response timeline.

This is similar to the contract Beshear’s office has entered with a legal team headed by the law firm Morgan and Morgan, in his lawsuits against opioid manufacturers and distributors, alleging unfair marketing practices which have contributed to Kentucky’s opioid crisis.

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